Sensient(US:SXT)2025-05-06 16:52Revenue and Earnings - Revenue for the three months ended March 31, 2025, was $392.3 million, an increase of 2.0% compared to $384.7 million for the same period in 2024, with foreign exchange rates negatively impacting revenue by approximately 2%[52] - Net earnings for the three months ended March 31, 2025, were $34.5 million, an increase of 11.4% from $30.9 million in 2024[64] Margins and Income - Gross margin improved to 33.6% for the three months ended March 31, 2025, compared to 32.9% in 2024, despite Portfolio Optimization Plan costs reducing gross margin by 50 basis points[53] - Operating income increased by 8.3% to $53.5 million for the three months ended March 31, 2025, from $49.4 million in 2024, with operating margins rising to 13.6%[55] Segment Performance - The Flavors & Extracts segment reported revenue of $193.7 million for the three months ended March 31, 2025, a slight increase from $193.1 million in 2024, with operating income rising approximately 6%[71][72] - The Color segment's revenue increased by approximately 5% to $167.8 million for the three months ended March 31, 2025, with operating income up about 10%[73][74] - Asia Pacific segment revenue grew by approximately 4% to $41.9 million for the three months ended March 31, 2025, despite a 1% negative impact from foreign exchange rates[75] - Asia Pacific segment operating income increased by approximately 8% to $9.4 million for the three months ended March 31, 2025, compared to $8.8 million in 2024[76] Costs and Expenses - The Company incurred Portfolio Optimization Plan costs of $2.9 million for the three months ended March 31, 2025, compared to $2.8 million in 2024, impacting overall financial performance[61] - Corporate & Other operating expenses rose to $15.8 million in Q1 2025 from $14.7 million in Q1 2024, primarily due to higher performance-based executive compensation costs[77] Cash Flow and Investments - Net cash used in operating activities was $9.0 million in Q1 2025, a decrease from net cash provided of $15.1 million in Q1 2024, attributed to increased performance-based compensation payments[81] - Net cash used in investing activities increased to $21.3 million in Q1 2025 from $10.9 million in Q1 2024, with capital expenditures rising to $16.9 million[82] - The Company acquired Biolie SAS for $4.8 million on February 14, 2025, enhancing its capabilities in natural color extraction[58] - The Company acquired Biolie SAS for $4.3 million in Q1 2025 as part of its investment activities[82] Tax and Compliance - The effective income tax rate decreased to 25.4% for the three months ended March 31, 2025, down from 27.0% in 2024, influenced by changes in foreign tax estimates[57] - The Company remains in compliance with loan covenants and anticipates using cash flow from operations and existing debt capacity for future cash requirements[78] Dividends and Tariffs - Dividends paid during Q1 2025 were $17.4 million, consistent with $17.3 million in Q1 2024, with dividends per share remaining at $0.41[83] - The Company expects to manage the impact of increased tariff costs through pricing actions, although additional tariffs could materially affect revenue and profitability[80] Inflation Impact - The impact of inflation was not material to the Company's financial position for the three months ended March 31, 2025, despite increased costs for certain inputs[79]